[LONDON] Global mining giant Anglo American announced on Tuesday a "radical" restructuring of the firm that will slash its workforce by almost two-thirds, as commodity prices crash on world markets.
Some of the jobs will be transferred via asset sales, although Anglo will also write off billions of dollars owing to the closure of loss-making mines.
The prices of metals and other raw materials, notably oil, are sliding on markets owing to weak demand growth, in particular from the world's second biggest economy, China.
Anglo's announcements, as part of its investor day, come as sector rival Rio Tinto said it would slash its spending next year owing to sliding metals prices.
In a statement, Anglo American chief executive Mark Cutifani said that "the severity of commodity price deterioration requires bolder action".
The London-listed company said it expects "impairments of US$3.7 to 4.7 billion, largely due to weaker prices and asset closures".
And Anglo said it plans to slash its workforce by almost two-thirds, from 135,000 staff to 50,000 after 2017.
The company published a graph showing the expected decline in jobs - to 99,000 next year and 92,000 in 2017 followed by another sharp reduction - via a combination of asset sales and internal cuts.
"We will be radically restructuring our portfolio, so the net result is expect to be a reduction to around 50,000 employees," a spokesperson confirmed in an email to AFP.
"But bear in mind that these include assets that we will sell, so the 85,000 jobs don't (all) disappear as many will be employed by new owners of those mines that we sell." Anglo has already been cutting jobs in recent years, with the workforce standing at 162,000 in 2013.
Mr Cutifani added that Anglo American plans to halve its business setup to leave just three components - its diamonds operation De Beers, Industrial Metals and Bulk Commodities.
"Anglo American is today setting out an accelerated and more radical restructuring programme to redefine the focus of its asset portfolio to transform the company's competitive position and create a more resilient business to deliver sustainable shareholder returns," the group statement said.
Delivering a blow to shareholders, Anglo said it would suspend dividend payments until the end of next year.
Anglo's share price slumped following the announcements, hitting an all-time low at 322.6 pence.
In London trade, it tumbled 12.29 per cent to 323.65 pence on the capital's benchmark FTSE 100 index, which finished 1.42-per cent lower overall compared with Monday's close.
Anglo added that it would further slash investment through to the end of next year by about US$1.0 billion.
Earlier on Tuesday, Rio Tinto said it planned to slash spending in 2016 by a similar amount to maintain profits in the face of the commodities price rout.
The weak demand situation has been worsened by a supply glut blamed on rising output by leading miners, including BHP Billiton and Rio.
Tumbling values for commodities, including Rio's main raw material iron ore, has massively increased the pressure on mining firms.
Critics have argued that large miners raise output in the face of falling prices to try to flood the market and drive smaller competitors out of business.
Rio Tinto shares were down a hefty 5.2 per cent and BHP Billiton plunged 5.1 per cent in London deals.
"With key benchmark commodity indexes below levels last seen in the 1990s, and Chinese demand set to remain weak, it is clear that commodity prices remain some way short of giving any evidence of bottoming out," said Michael Hewson, chief market analyst at traders CMC Markets UK.